The fallout from one of the U.K. property sector’s more dramatic investor collapses is moving into the courts.
Administrators overseeing the failed Godwin Group property companies launched a roughly £155 million (~$208.1 million) claim against four directors tied to one of the investment vehicles, securing court orders that freeze their assets while the case proceeds, Bisnow reported. The lawsuit, filed in London’s High Court in May, alleges misconduct tied to Godwin Capital No. 8, one of several entities used to raise money from retail investors for property developments across Britain.
The claim includes allegations of breach of fiduciary duty, fraudulent trading, knowing receipt and dishonest assistance, according to letters sent by administrators at MHA. The defendants include directors Richard Johnston, Andrew Mitchell, Stephen Pratt and Stuart Pratt, along with five companies they control.
The legal action marks the latest chapter in the unraveling of the Godwin empire, which raised about £162 million between 2019 and 2024 through loan-note offerings that promised fixed returns of 10 to 12 percent over two years.
Investors were told their money would fund projects ranging from roadside retail to single-family housing developments throughout the U.K. Many investors had committed substantial sums, with some reportedly placing life savings worth hundreds of thousands of pounds into the vehicles.
But administrators found that investor funds had not been secured against property assets as advertised. Their investigation uncovered evidence that money from newer investors was used to repay earlier ones, raising fresh questions about how the business operated in its final years.
Administrators say recoveries are likely to be minimal. When Godwin entered administration last year, investigators initially identified only about £5 million in assets available for creditors. That figure has since crept up to a potential £6 million after additional appointments within the company structure, still leaving a massive shortfall for more than 2,000 investors.
The timing of Godwin’s fundraising has also drawn scrutiny. Bisnow previously reported that the company continued raising money as late as September 2024, months after internal concerns emerged and after some investors had already been warned of repayment delays.
Read more
Commercial
International
UK competition watchdog probes hotels’ use of CoStar platform
Residential
International
British developer appears to shatter global home sale record